In the market for a home renovation?
Renovating your home is a great and less expensive option than purchasing a new home. Plus, renovations can also help to increase the value of your property, add curb appeal, and address any wear-and-tear related damage.
Unbeknownst to most, renovating your home can have numerous implications for your insurance. Before beginning your renovation, we strongly encourage our clients to contact Haas Insurance. Our experienced brokers will be able to assess how your repairs, upgrades and changes to your home will affect your coverage.
Perhaps the largest benefit of beginning a home renovation is the added value that it will likely bring to your home.
We encourage you to consider these three factors before beginning:
- Market and Home Value: It’s important to assess whether a renovation will increase your home’s value and make it above market value for the neighbourhood. If your home is surrounded by smaller, cheaper homes, pricing your home out of the market could greatly impact your ability to sell it in the future.
- Don’t Forget About Future Buyers: Always think ahead. Even if you aren’t planning on selling your home now, you may want to in the future. It’s wise to design your renovation in terms of what most people want. For example, eliminating a bedroom to increase the size of your master closet will not appeal to most buyers, especially families.
- Assess the Return on Investment: Try to determine what your return on investment will be. For example, some renovations will add instant value, such as updating a kitchen or bathroom. However, other renovations may not add much value at all, or may take a few years to garner value.
Once you’ve decided to move ahead with your renovation, you’ll want to consider these important factors:
- Contractors: If you’re employing a contractor to complete the renovation in your home, be sure to do your research. We suggest asking others for referrals, and parsing the reviews online. If you find a contractor you’re interested in hiring, request references, proof of insurance, and qualifications. Hypothetically, hiring a contractor that does not have insurance can make you liable if an injury occurs. Plus, insurance companies don’t cover faulty workmanship. Contractors are central to your renovation, so ensuring that they’re reliable, trustworthy, and insured is key.
- Review Policy Documents: It’s important to review your policy details with an experienced insurance broker. They can help to provide clarity on coverage changes or limitations that will occur during your renovation project. Most insurance companies have exclusions during a home under renovation. It’s important to understand your policy limitations and obtain permission from the insurance company before your start your renovations.
- Occupancy Status: When your renovations begin, your home’s occupancy status could change to “unoccupied.” Though, it is important to note that this is not the same as “vacant.” If you’re going to be living elsewhere during your renovations, we suggest contacting a Haas Insurance broker to help you navigate these policy disruptions.
- Permit: Even if you’ve hired a contractor to complete your renovation, it is still your responsibility to ensure that your permits are in order. If you’d like a contractor to put the necessary permits in place, ensure that it is placed in the contract so they are legally contraded to do so.
- Home Replacement Value: For those unfamiliar with the term, replacement value refers to the amount that would have to be paid to replace a specific asset, which is determined using its current worth. Renovating your home will ultimately impact the value of your residence, thereby changing the replacement value as well. We encourage you to get your home re-evaluated by our brokers in order to ensure the replacement value is updated and documented prior to the start of your project.
- Records and Receipts: Be sure to keep all of the records, receipts, and contracts from your renovation. Having a paper trail serves as an effective resource as it contains all necessary details about the renovation. If an issue is to arise, you’ll have all the information you need together in one place.
To learn more about how your insurance coverage will change during your renovation, talk to an experienced Insurance Broker at Haas Insurance in London, Ontario.